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Federal agency alleges ‘deceptively marketed’ CBD products, fines company and refunds customers



A federal agency announced plans August 23 to send refunds to people who’d bought CBD products from a company that allegedly used deceptive marketing tactics, reports Marijuana Moment.


The Federal Trade Commission, a bipartisan federal agency established to protect the interests of American consumers, said it’s sending payments to 576 people across the U.S. These people bought CBD from Arizona-based Kushly Industries, a company the FTC said made “false or unsubstantiated claims” about its products.

At an average payment of $36, the move will cost the FTC almost $21,000. But the agency previously collected more than $30,500 from Kushly in consumer redress. It appears to be the first time the FTC has issued a refund for CBD products, according to Marijuana Moment reporter Kyle Jaeger.


The FTC had filed a complaint against Kushly and its CEO in March 2021, saying the company made claims that its CBD products could effectively treat or cure a variety of conditions. These ranged from common issues like acne and psoriasis to more serious diseases including cancer and multiple sclerosis.


The FTC’s complaint accused the company of falsely claiming that scientific studies or research had proven CBD products effectively treat, mitigate, or cure diseases including hypertension, Parkinson’s disease, and Alzheimer’s disease.


The FTC’s complaint accused the company of falsely claiming that scientific studies or research had proven CBD products effectively treat, mitigate, or cure diseases including hypertension, Parkinson’s disease, and Alzheimer’s disease.


Citing scientific studies in an attempt to substantiate the benefits of CBD was not enough for the FTC and, as Jaeger noted in his report, might have actually hurt the company.


The June 2021 court order said that “‘competent and reliable scientific evidence’ must consist of human clinical testing of the Covered Product, or of an Essentially Equivalent Product, that is sufficient in quality and quantity based on standards generally accepted by experts in the relevant disease … to which the representation relates, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that the representation is true.”


Kushly and its CEO neither admitted to nor denied the allegations in the complaint, according to the court order. But as a result of the allegations they had to send a letter to customers who’d purchased products from late May 2019 through late August 2020, acknowledging the FTC’s allegations of false claims.


Kushly and its CEO neither admitted to nor denied the allegations in the complaint, according to the court order.

Asked why Kushly was singled out for the refund process, a spokesperson for the FTC told Marijuana Moment the commission “doesn’t comment on the specific reasons that it chose to bring an action against any company, except what’s in the press release and the complaint.”


The U.S. Supreme Court ruled in 2021 that the FTC doesn’t have authority to seek monetary relief in federal court going forward. The commission has urged Congress to restore that ability.


About the refunds: Consumers will receive either a PayPal payment or a check in the mail. Recipients who have questions about their refund should contact the refund administrator, Analytics, Inc., at 1-866-461-4332. To avoid scams, remember that the Commission never requires people to pay money or provide account information to get a refund.

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